A drastic cut to Kela compensations, reliefs to price restrictions – these are on the table in the budget tightening

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The Ministry of Finance's internal budget negotiations begin on Wednesday. IL put together what's coming and what ways the government is now considering to improve citizens' purchasing power. reliefs-naumlmauml-ovat-poumlydaumlllauml-budjettivaumlaumlnnoumlssauml-291f415.jpg” alt=”Drastic cut to Kela compensations, reliefs to the price constraint – theseä are tableällääännössä” />

The Ministry of Finance, led by Minister of Finance Annika Saariko, will prepare its budget proposal during Wednesday and Thursday. JANI KORPELA [email protected] Today at 7:00 a.m.

The Ministry of Finance (MoF) will meet on Wednesday and Thursday to prepare its proposal for next year's state budget. The Ministry of Finance's budget proposal serves as the basis for the government's budget rush, which is at the turn of August and September.

Government sources do not expect any big surprises from the Ministry of Finance's proposal, because the most significant new decisions, for example to improve citizens' purchasing power, are being left behind in the budget rush.

The government already agreed on the allocation of cuts of 370 million euros by ministry during the spring budget debate, and no major changes are expected. Minister of Finance Annika Saarikko (centre) said in the spring that most of the cuts will be aimed at new transport corridor projects and development aid.

Also, the 64 million euro cut in Kela reimbursements for private care and research is being implemented , although it has received some criticism.

This is how the cut would be

According to the government's proposal, Kela reimbursements for private examination and treatment would otherwise be removed, except if the procedures are prescribed by a specialist in psychiatry or oral and maxillofacial surgery or a dentist. The psychologist's examinations would also be reimbursed. For example, physiotherapy would no longer be eligible for Kela compensation.

The Kela reimbursement for procedures performed by a doctor would also be removed, except for certain exceptions, which would be defined in more detail in a government decree.

In the future, you would get a compensation of about eight euros for all general and specialist doctor's appointments, while currently the compensation for the doctor's fee is about 16 euros. However, for the treatment of a specialist in psychiatry, compensation would be paid in accordance with the special tax.

The government finances the implementation of Kela compensation's binding nurse assessment. Next spring, the statutory caregiver ratio will be 0.7 workers per elderly person in round-the-clock care.

Kela reimbursements for private treatment and examinations will be significantly cut next year. Elias Lahtinen

Index increases for subsidies

Consumer prices have risen at a historic pace, so the government is expected to make decisions next year to improve citizens' purchasing power.

At least the subsidies linked to the national pension index for low-income earners will rise next year, as they follow the rise in prices.

Among other things, the national pension, labor market support, the basic part of the income support and the study grant increased already at the beginning of August, as the government decided to present early index increases for subsidies linked to the national pension index due to the sharp rise in prices.

Chairman of the Greens, Minister of Climate and Environment Maria Ohisalo has proposed an additional index check for low-income subsidies for the fall as well. The government is discussing this in a frenzy, even though next year's budget is to be decided.

According to government sources, it is likely that the increase in the commuting expense deduction will be extended into next year. The prime minister's party SDP has also proposed considering increasing the deduction for next year.

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The fate of the income tax dispute

Among others, the chairman of the center Annika Saarikko and the prime minister, the chairman of SDP. Sanna Marinhave mentioned the reduction of earned income tax as a possible means of improving purchasing power. RKP's chairwoman, Minister of Justice Anna-Maja Henriksson has also supported the idea.

According to information from Iltalehti, the Ministry of Finance's budget proposal does not yet take a position on what kind of income tax reduction it could be, but the decision on the matter will be left to the government's budget tussle.

The reason is that the government's goal is to take several measures to improve purchasing power, and there still needs to be a political twist on this whole and its details. Of the governing parties, only the Left Alliance is tight-lipped about the income tax reduction.

The Central Chamber of Commerce suggests that the Ministry of Finance include in its budget proposal that the earned income tax would be reduced by two percentage points in all income categories next year.

– In terms of cyclical policy, the income tax reduction would hit the right situation, because here economic growth is weakening, says Central Chamber of Commerce CEO Juho Romakkaniemi.

The Center and SDP have emphasized that a possible income tax sale should be targeted to low- and middle-income earners.

– Isn't the progression of taxation in Finland, which is one of the strictest in the world, already enough? Romakkaniemi asks.

The government has hopes that the income tax reduction would be able to moderate autumn's moderate salary solutions, so that they would not contribute to accelerating inflation.

The reduction in food value added tax proposed by the Left Alliance does not receive much support from the other government parties. Tiina Somerpuro

Food VAT sale unlikely

In order to improve purchasing power, the government already has a long list of proposed measures on its table, and there will probably be more before the budget rush.

Chairman of the Left Alliance, Minister of Education Li Anderssonhas, for example, hinted at reducing the VAT on food as one solution to rising prices.

Government partners are suspicious of this, as it is not estimated to be fully reflected in consumer prices and to be targeted precisely enough at those who most desperately need relief from the increased prices to survive.

Andersson has also proposed that in the budget rush, the protective part of the foreclosure and the increase in child support could be increased.

In June, the center proposed the establishment of special economic zones. Residents and businesses in such areas could receive special incentives. Annika Saarikko said at the time that there could be such areas especially in Eastern and Northern Finland.

The support of Eastern Finland, which suffered particularly from the economic effects of the war in Ukraine, is on display even in the riots.

The situation of families with children on display

The Greens, on the other hand, have proposed energy money, which would be 44 euros per month. Funding would be targeted especially to those areas where inflation hits the hardest.

The Ministry of Finance has already considered solutions to react to the rise in energy prices, and these proposals are to be processed in connection with the budget crisis.

Families with children are also likely to be taken into account in one way or another in the government's “purchasing power package”. The prime minister's party, SDP, has proposed lowering daycare fees.

Social and Health Minister Hanna Sarkkinen (left) proposed increasing the child allowance in June so that it would be linked to the index. Center MP Pekka Aittakumpu proposed the same on Monday.

Minister of Family and Basic Services Aki Lindén(sd) wrote on Twitter at the end of July that the decrease in the birth rate is an issue that must be brought up as the number one priority in the budget crisis.

The government will probably consider families with children in its decisions to improve purchasing power. Illustration picture. Mostphotos

Pressure in the funding of the police

Already during the spring budget dispute, there was a lively discussion about the allocation of the police, and the government is under pressure to outline additional increases. There is also a noticeable lack of funding in rescue operations.

The ongoing underfunding of municipalities will become a problem for the state at the beginning of next year, when the new welfare areas established as a result of the social security reform will start operating. They get their funding from the state.

The government's “investments for the future” are coming to an end next year, and some of the parties are pushing for their continuation.

Future investments received criticism from the outset, as the government was considered to have sunk expenses outside the spending framework into future investments, which are usually covered from the budget. Such were, for example, some of the investments on the education side.

The government reduced the fuel distribution obligation earlier, and it seems to have curbed the rise in fuel prices. The pressure for new reductions has been created, among other things, by the opposition party Basic Finns, which has demanded the complete removal of the distribution obligation temporarily.

According to Iltalehti's information, a decision on new reductions of the distribution obligation is not likely in the budget tussle. The Greens in particular have a tight-lipped attitude to it.

Government sources do not expect significant openings regarding employment measures until this fall. This is the last budget prepared by the Marin government before next spring's parliamentary elections.

This is how politicians save you from the price squeeze: petrol and food taxes down 15.7.2022 9:30 The price of petrol fell further – an expert assesses the future 28.7. 10:56Kela's concerns did not stop the government – drastic cut in Kela compensations will be implemented 15.3.2022 20:41

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